Cabin Business

The Fayetteville Shale Play is an unconventional source of natural gas located in north central Arkansas. Gas companies and their providers have been settling in Conway and the surrounding areas for the past few years to take advantage of the opportunities provided by the play.
It has been estimated that the Fayetteville Shale Play will produce an economic impact of almost $18 billion over a five-year period that began last year. The three major movers in the play in central Arkansas are Southwestern Energy, Chesapeake Energy and XTO Energy.
Southwestern Energy
George Sheffer, vice president of exploration and production services for Southwestern Energy, said the company has been in Arkansas almost 80 years. It was originally called Arkansas Western Gas, and the company drilled wells in the western part of the Arkoma basin. In 1979 the company changed its name to Southwestern Energy.
In 2002, Sheffer said, the company was inspecting some sandstone wells in the state that produced more wells than they should have, and as the Barnett Shale Play in Texas was a known source of gas, they thought the gas might be coming from shale.
“That’s where the Fayetteville shale kind of sprung from,” he said.
There was much ramping up to be done in the exploration and development of a huge shale play. Sheffer said, “North central Arkansas did not have much presence in the natural gas industry prior to the Fayetteville Shale. A lot needed to be addressed.”
SWE, which focuses on exploration and production, established its own gathering company, DeSoto Gathering, to put out pipelines to gather gas to the large interstate pipelines, he said. The company also established DeSoto Drilling.
“There weren’t drilling companies, so we started our own. DeSoto Gathering and Drilling were formed due to the lack of infrastructure in this area.”
He added, “Industry infrastructure has now come into the area, once we drilled enough wells and made it attractive for the service companies. That came after we really developed the economic viability and they realized there was a potential for the long term here.”
Regarding what kind of outside services the company uses, he said there are many.
“We use a lot of outside services in the process of drilling and completing a well. We use a lot of contract services. We have our own drilling rigs and also contract out rigs. Frac services, completion services … we lease some services like compressors. A lot of services like trucking services are contracted for hauling both fluids and materials. Crane services, erosion control services. The list is huge.”
Asked how SWE attracts vendors, Sheffer said, “We could need anything from a box of nails to a drilling rig. A lot is highly specialized. We go looking for the equipment we need, and we have a group, our supply chain management group, that handles a lot of the management. We’re looking for a supplier that adds value to our company, someone that’s competitive with pricing, who understands what our business is and has quality procedures and processes in place also, beyond just providing a service.”
He said a good vendor also should “demonstrate a commitment to health and safety and the environment. We have a business code of conduct they need to follow.” The supplier should also be in compliance with all applicable state and federal regulation, he noted.
Anyone interested in becoming a supplier may go to www.swn.com and complete a pre-qualification form, he said.
As to finding employees for its operations in the Fayetteville Shale Play, Sheffer said, “Southwestern Energy strives to be the employer of choice in our industry. I think the culture we’ve created has helped us attract some of the best and brightest. Our focus is on our company’s formula for success, which focuses on our employees being the right people doing the right things. That has created a very positive and powerful culture that people want to be a part of. I know we’ve hired more than 600 people in this region (since 2005). I think more than 80 percent of people working in the Fayetteville Shale are Arkansans.”
He said anyone wanting to work for the company may go to the Web site.
Sheffer said skills needed vary, as do the jobs.
“There’s such a wide variety of jobs within the company. They range from a roustabout in the field that works on wells and rigs to landmen, geologist, petroleum engineers … Skills would vary depending on what position. We’re very fortunate that we do have a skilled workforce, and we use our employees’ expertise to mentor new hires.”
Sheffer could not share many details about the decision to locate a headquarters in Conway. The company announced in December it will build a $25 million, 100,000 square-foot building on an 11.5-acre site at The Village at Hendrix to support its Fayetteville Shale operations.
“This was a very major decision for us. It’s one we’re confident we made the right decision in choosing Conway,” Sheffer said.
Chesapeake Energy
Mark Raines, manager of public relations for Chesapeake Energy, said in response to a question about recruiting employees, “Chesapeake’s Web site has a complete listing of job opportunities in each of our operating areas. A number of applicants submit resumes through the online mechanism. Additionally, we actively recruit from the country’s best university programs for our technical disciplines such as petroleum engineering, chemical and mechanical engineering, geosciences and energy management. Other required disciplines include information technology, law, accounting, finance, GIS, and natural gas compression. Often, the best jobs — and the best employees — often come together through word of mouth.”
Regarding the skills that employees need, Raines said, “Though it is sometimes an overused concept, it is very important that employees know how to work within a team concept. It takes a committed team of individuals, performing their own specific and equally important jobs, to be successful.”
Chesapeake Energy also faced issues with a lack of infrastructure upon coming to explore and develop the Fayetteville Shale Play. Raines said the company’s needs included “Skilled workforce, pipelines (how do we move the gas we produce to the marketplace), and specialized service providers. That is no longer the case. We have a sufficient locally based and trained workforce, gathering lines are being installed to move natural gas from the well to, eventually, the marketplace and there are approximately 100 industry service providers in the Fayetteville Shale.”
Raines added potential vendors are asked to fill out a master service agreement form, which includes all the applicant’s capabilities and certifications. The information will be maintained in the Chesapeake vendor database for one year. If the products and/or services are required, a Chesapeake team member will contact the vendor.
The third major player, XTO Energy, operates in several areas across the country. Corporate representatives were not available for interviews for Central Arkansas Business Network.